FirstFT: Xi replaces missing generals in China’s missile forces

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Good morning. China’s leader Xi Jinping has replaced the two missing generals who had been commanding its missile forces, in effect confirming the largest purge at the top levels of the military in a decade.

General Li Yuchao, commander of the People’s Liberation Army Rocket Force, and his deputy General Liu Guangbin disappeared from public view several months ago amid what foreign experts and intelligence officials say is a drive to crack down on corruption and enforce Communist party discipline.

State media said on Monday that Wang Houbin, deputy commander of the PLA navy since 2020, was now head of the rocket force, the arm of the PLA responsible for land-based nuclear ballistic missiles.

Xu Xisheng, an air force officer and party central committee member, was named as the force’s new political commissar.

Beijing has not made any announcements about the whereabouts of Li and Liu, but foreign officials briefed on intelligence regarding the matter believe the two generals are being investigated for allegedly leaking military secrets.

The shake-up comes amid a string of announcements about new anti-corruption measures in the armed forces and a renewed push to ensure the PLA’s absolute loyalty to the party and to Xi himself. Read the full story.

And as China marks the 96th anniversary of Communist party’s armed services today, here are two more stories I recommend on China’s military:

• Chinese drones: China has slapped export controls on a wide range of drones and drone components, a move with potential impact on the Ukraine war and on public security applications in many western countries.

Here’s what else I’m keeping tabs on today:

• Results: Earnings reports are due from HSBC, Toyota, Mitsui & Co, Mitsubishi UFJ Financial Group and Nomura.

• Another typhoon: After the deadly Typhoon Doksuri last week, Chinese authorities are now preparing for Khanun to hit Zhejiang province this week, the sixth typhoon projected to hit China this year. (CNN)

Five more top stories

1. New data showed manufacturing activity in China contracted for a fourth straight month in July while growth in services and other sectors slipped. China’s weak manufacturing activity added to calls for Beijing to unveil concrete measures to boost the flagging recovery of the world’s second-biggest economy. Here’s more on China’s sputtering recovery.

• Renminbi rallies: China’s currency is on track for its best monthly performance against the dollar in half a year, after policymakers deployed direct and indirect support measures to fend off downward pressure on the currency.

• Hong Kong: The Chinese territory’s economy grew by only 1.5 per cent in the second quarter year on year, as the city faces headwinds from a slower economic rebound in mainland China and declining exports.

2. Pakistan’s prime minister Shehbaz Sharif vowed to punish the perpetrators of a bomb attack that killed at least 40 people and injured more than 100 at a political gathering in the country’s north. The bombing on Sunday targeted a rally of the Jamiat Ulema-e-Islam (F) party and was one of Pakistan’s worst terroristic attacks in recent years. Here are more details.

3. US stocks have notched their longest monthly winning streak in two years, as optimism about falling inflation and resilient growth encourages increasingly broad market gains. The S&P 500 rose 3.1 per cent in July, including a 0.2 per cent gain during the final session of the month on Monday. Read more on the market rally.

4. Elon Musk’s X Corp has threatened to sue the Center for Countering Digital Hate, which has suggested there has been a rise in hate speech and disinformation on Twitter since the entrepreneur took over the platform. X Corp’s legal threat comes as Twitter faces growing pressures, including the rapid loss of advertising revenue. Read the full story.

5. The junta that seized power in Niger last week has accused the ousted government of authorising a French military operation to rescue deposed president Mohamed Bazoum. France has demanded the reinstatement of Bazoum, who is regarded as the west’s staunchest ally in the troubled Sahel region. The military government offered no proof for its accusation. Here’s the latest on the coup in Niger.

The Big Read

The US government has become a far more motivated customer for defence and weapons start-ups, driven by China’s rapid development of advanced weapons systems, the war in Ukraine and startling advances in artificial intelligence. Here’s how Silicon Valley is helping the Pentagon in the new tech arms race.

We’re also reading . . . 

Chart of the day

Japanese government bond yields jumped on Monday as global debt, currency and equity markets began to absorb a landmark shift by the Bank of Japan to allow yields to rise more freely. Here’s more on the BoJ’s shock decision.

Take a break from the news

. . . and enjoy this mouthwatering review of the best lobster rolls in the Hamptons. The expensive beach enclave on New York’s Long Island is still home to down-to-earth shacks and diners where you can tuck into this simple yet succulent snack.

Additional contributions by Tee Zhuo and Gordon Smith